The story behind Amulet Capital's 3-practice merger — The deal team explains

Amulet Capital Partners closed the fourth private equity investment in GI June 6 when it formed US Digestive Health, a gastrointestinal-focused practice management organization.

Amulet merged Lancaster, Pa.-based Regional GI, Wyomissing, Pa.-based Digestive Disease Associates and Malvern, Pa.-based Main Line Gastroenterology Associates through the deal.

Amulet's president, managing partner and acting CFO Ramsey Frank and its principal Gabriel Luft shared insights into the deal with Becker's ASC Review.

Note: Responses were edited for clarity and style.

Question: What drew Amulet to invest in these three practices?

Ramsey Frank, Gabriel Luft: Amulet weighs a number of factors when evaluating physician practice management company investment opportunities, including:

1. The quality of the associated medical groups
2. The fragmentation of the local healthcare landscape and our ability to provide support and resources for improved delivery of care and coverage of the patient population
3. The growth opportunity in the local market and more broadly

This investment scored well in all of these categories.

Q: Could you share some insights into the negotiation process between the three practices?

RF, GL: The practices had known each other for several years ahead of choosing to pursue this transaction. They were drawn together by their common focus on delivering high-quality clinical care and their common desire to enhance and expand their operations, while maintaining their commitment to their patients.

In pursuing a potential partner who could assist them in achieving their goals, they were very thoughtful in their selection of advisers and counsel and in their overall approach to finding the appropriate business partner, who would not only provide the necessary management support and resources, but who also shared their values and commitment to providing excellent care to their patients.

With all of these considerations in mind, Amulet collaborated closely with the medical groups to form a management services organization and is providing to the groups, and to the MSO, its extensive financial and operational expertise.

Amulet is able to provide strong support to and understand the demands and needs of the medical groups' clinical practices: US Digestive Health — Amulet's portfolio company — is being led by Jerry Tillinger, a medical group leader with many years of practice experience, and Scott Hayworth, MD, CEO of [Mount Kisco, N.Y.-based] CareMount Medical Group, is the nonexecutive chair of the board of directors. Together, they bring many years of experience working with physicians to successfully grow their practices.

Q: How will US Digestive Health compete with other PE-backed platforms?

RF, GL: US Digestive Health is the market leader in Pennsylvania. Our strategic focus is supporting the operations of the highest-quality GI groups, which can then become the employer of choice for gastroenterologists and their staff. Our management team has extensive physician-practice management experience and is dedicated to providing affiliated medical practices with the resources and expertise they need to thrive and expand. As a result of our expertise, we are the PE partner of choice in the GI marketplace. [We bring] best practice programs and strong physician engagement to our management operations.

US Digestive Health will assist our managed medical groups in improving patient access and, in collaboration with those groups, is a leader in lowering the cost of care for the groups' patients. We have employed a conservative capital structure that will enable us to achieve our objectives irrespective of the market environment.

Q: Three years down the road, what will US Digestive Health look like?

RF, GL: It will be a market leader in gastroenterology with a reputation for working in close collaboration with our affiliated medical groups, providing them with innovative and cost-effective management services, and supporting their provision of high-quality clinical care. With our support, they will become the employer of choice for the most qualified physicians and staff.

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